Samuel Israel Surrenders to Authorities

Israel had been on the run from police since June 9, the day that he was scheduled to report to a Massachusetts prison. He never arrived, and his abandoned car was found near the Bear Mountain Bridge in New York with the message “Suicide is Painless” written on the windshield.

Following Israel's mysterious disappearance, police aircraft and boats began searching the river for his body. When they could not find his body or any witnesses who saw a man jump, they determined that the suicide was a hoax.

They issued a Wanted poster for Israel, and one official told CBS News there was “reason to believe he may be potentially prone to erratic or violent behavior.”

Israel, the cofounder of the Stamford, Conn., hedge fund Bayou Group LLC, had been set to serve 20-year sentence for defrauding Bayou investors of more than $400 million. Israel, along with Bayou chief financial officer Daniel E. Marino, pled guilty to fraud charges in September 2005. Israel had shut down the hedge fund only months before, admitting it was a fraud.

Israel rode a motor scooter to the Southwick, Mass., police station and turned himself in while talking on the phone to his mother. “Obviously, she probably had some kind of influence, which mothers usually do,” said Frank Dawson, a spokesman for the U.S. Marshals Service in Boston. “He knew they were getting close to him, so he probably did the right thing.”

Israel pleaded guilty to conspiracy, wire fraud and investment advisory fraud in September 2005 and was given a 20-year sentence. Israel’s lawyer had convinced authorities that Israel was not a flight risk and they allowed him to drive himself to prison. Israel instead drove to Bear Mountain Bridge in New York and abandoned his car.

"It looks like it could either be a suicide or a staged suicide, a fake suicide," said police investigator Bruce Cuccia, following Israel's disappearance. "Without a body, we don't have conclusive evidence either way." The message written on Israel’s windshield, “Suicide is Painless,” is the song that was sung during a fake suicide in the movie “M*A*S*H.”

Following Bayou's public scandal, Marino, who was also sentenced to 20 years in jail, wrote a six page "suicide note and confession," although the never followed through on his suicide threat. Authorities used information in the letter in the ensuing investigation. Marino’s confession began by describing events in December 1998 on the last day of a bad year in the markets. Bayou’s losses had overwhelmed its gains for the previous two years. “The solution, devised by Mr. Israel and a lieutenant, James Marquez, was simple: produce a fake audit of the funds’ performance and try to make up the losses next year,” reported the New York Times.

Israel and Marino pleaded guilty to conspiracy, wire fraud and investment advisory fraud in September 2005. Israel admitted sending out false financial information to investors “which made it appear that Bayou was doing better than it really was.”